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Underutilized Instances in EC2 Auto Scaling Group

The short version

Oversized instances within Auto Scaling Groups lead to inflated baseline costs, even when scaling adjusts the number of instances dynamically.

PointFive Research

Cloud cost research at PointFive

AWS service
AWS EC2
Category
Compute
Reference
CER-0014
Type
Overprovisioned Resource

Explanation

Why the waste happens and who it affects.

When workloads consistently use only a fraction of the available CPU, memory, or network capacity, there is an opportunity to downsize to smaller, less expensive instance types without sacrificing performance. Right-sizing helps balance capacity and efficiency, reducing compute spend while preserving workload stability.

Billing model

The pricing dimensions that drive this cost.

EC2 instances are billed per second (60-second minimum) for Linux, Windows, RHEL, and Ubuntu Pro, and per full hour for SLES, based on instance type, operating system, and purchase model (e.g., On-Demand, Reserved Instances, Spot Instances). Larger instance types incur higher charges regardless of whether the workload fully utilizes the available resources.

How to detect

5 checks to find it in your estate.

  • Identify Auto Scaling Groups where instances exhibit low average CPU, memory, or network utilization relative to their capacity.
  • Review instance sizing in relation to historical workload peaks and scaling behavior.
  • Assess whether smaller, more cost-effective instance types could support the same workload with acceptable performance.
  • Evaluate launch templates (and migrate any remaining launch configurations, which are deprecated) to determine if default instance types were selected without performance optimization.
  • Confirm with application and infrastructure owners that resizing aligns with performance, availability, and SLA requirements

How to fix

4 ways to remove the waste.

  • Evaluate smaller instance types that better match the workload's actual resource requirements.
  • Update the launch template for the Auto Scaling Group to use the selected instance type, and deploy changes during a low-traffic window if needed.
  • After downsizing, monitor performance metrics to ensure the workload continues to meet application and SLA expectations.
  • Regularly reassess instance sizing as usage patterns evolve to maintain ongoing cost efficiency.

Documentation

Vendor references for pricing and configuration.